On Thursday, a month after being hit with a penalty of $ 2.8 billion for allegedly abusing its dominant market position, the company reported a net loss of 5.5 billion RMB ($ 836 million ) on RMB 187 billion in revenue for the January-March quarter.
Revenue was up 64 percent year-on-year, boosted by the acquisition of a supermarket chain last year, and exceeded analysts’ expectations.
“In the last fiscal year, we have been through all kinds of challenges, including the Covid-19 pandemic, fierce competition, as well as an anti-monopoly investigation,” CEO Daniel Zhang said.
Zhang said the company accepted the record antitrust sanction “with sincerity” and will ensure future compliance “with determination.” He added that it helped them reflect on their “social responsibilities and commitments”.
Alibaba’s US-listed shares fell nearly 5% at the start of trading.
The reigning Chinese e-commerce leader also presented a sweeping investment plan to compete with upstart rivals such as Pinduoduo, which overtook Alibaba in terms of annual buyers late last year, partly in their offering massive discounts. Alibaba has also invested to take on rival Meituan in delivering food.
“We can see that so many of our competitors are taking huge losses and investing huge amounts of money. . . there is no reason for us not to invest, ”said CFO Maggie Wu.
Alibaba has said it will invest all of its additional profits over the next 12 months to develop its technology platform, support its merchants and attract new customers. He expects revenues to exceed RMB 930 billion during the period, compared to RMB 717 billion last year.
For the first quarter, sales picked up at Alibaba’s major e-commerce sites Taobao and Tmall, but growth in its cloud computing business slowed to a 37% year-over-year increase, a key customer having reduced its use internationally.
Alibaba did not disclose the client’s name, but Robin Zhu, an analyst at Bernstein, said it was likely ByteDance, the Chinese tech company behind TikTok.
“The loss of this business will remain an obstacle to Alibaba Cloud’s revenue growth in the coming year,” he said.
The cloud is a key profit driver for foreign tech giants like Amazon and analysts expected Alibaba to take advantage as the company finally turned profitable last year.
Meanwhile, Alibaba’s results showed that its fintech arm, Ant Group, posted record profits in the fourth quarter of last year, the first indication of the state of its business after Chinese authorities canceled its initial public offering of $ 37 billion in early November.
Ant made an estimated profit of Rmb 21.8 billion in the quarter, with its listing suspended in the middle of the October to December period. Alibaba records a third of Ant’s profits a quarter behind.
Fourth quarter profit matched Ant’s reported first half 2020 profit and was an increase from the estimated RMB 14.5 billion earned in the third quarter.
Still, the profit came before Chinese authorities imposed a large-scale restructuring of the company that will cut back on operations this year.